Intuitive(ISRG) - 2024 Q3 - Quarterly Report

Financial Performance - Total revenue for Q3 2024 reached $2,038.1 million, a 16.9% increase from$ 1,743.7 million in Q3 2023[15] - Product revenue was $1,709.2 million, up 17.8% from$ 1,450.8 million year-over-year[15] - Net income attributable to Intuitive Surgical, Inc. was $565.1 million, representing a 36% increase from$ 415.7 million in Q3 2023[15] - Gross profit for Q3 2024 was $1,373.9 million, compared to$ 1,167.2 million in Q3 2023, reflecting a gross margin improvement[15] - Basic net income per share increased to $1.59 from$ 1.18 in Q3 2023[15] - Total comprehensive income attributable to Intuitive Surgical, Inc. was $601.5 million, compared to$ 439.0 million in Q3 2023[15] - Net income for the nine months ended September 30, 2024, was $1,649.5 million, an increase from$ 1,206.6 million in the same period of 2023, representing a growth of approximately 36.5%[18] - Operating income for Q3 2024 increased by 24% to $577 million, compared to$ 466 million in Q3 2023[150] - Net income attributable to Intuitive Surgical, Inc. for the period was $1,191.8 million[81] Cash and Investments - Cash and cash equivalents decreased to$ 2,413.3 million from $2,750.1 million as of December 31, 2023[11] - Long-term investments rose significantly to$ 4,079.8 million, compared to $2,120.0 million at the end of 2023[11] - Cash, cash equivalents, and restricted cash at the end of the period were$ 2,446.3 million, down from $3,622.9 million at the end of the previous year[18] - The company experienced a net cash used in investing activities of$ (2,008.6) million, contrasting with a net cash provided of $684.1 million in the prior year[18] - Cash and cash equivalents plus investments increased by$ 0.97 billion to $8.31 billion as of September 30, 2024, from$ 7.34 billion at the end of 2023[177] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $1.59 billion, slightly less than net income of$ 1.65 billion[181] Operating Expenses - Operating expenses increased to $796.6 million, up from$ 701.4 million in Q3 2023, driven by higher selling, general, and administrative expenses[15] - Selling, general and administrative expenses for Q3 2024 rose by 13% to $511 million, up from$ 452 million in Q3 2023, driven by higher headcount and personnel-related expenses[169] - Research and development expenses for Q3 2024 increased by 15% to $286 million, compared to$ 249 million in Q3 2023, primarily due to higher personnel-related expenses[172] - Selling, general and administrative expenses for the nine months ended September 30, 2024, increased by 9% to $1.53 billion, compared to$ 1.40 billion in the same period of 2023[171] - Research and development expenses for the nine months ended September 30, 2024, increased by 15% to $851 million, compared to$ 739 million in the same period of 2023[172] Assets and Liabilities - Total assets increased to $17,743.4 million, up from$ 15,441.5 million at the end of 2023[12] - Total accounts receivable, net, as of September 30, 2024, was $1,153.0 million, compared to$ 1,130.2 million as of December 31, 2023, reflecting a slight increase of 2.0%[44] - Total inventory as of September 30, 2024, was $1,481.7 million, up from$ 1,220.6 million as of December 31, 2023, indicating a significant increase of 21.4%[44] - Total stockholders' equity increased to $15,677.5 million as of September 30, 2024, up from$ 14,796.5 million[77] Legal and Regulatory Matters - The company is currently involved in multiple product liability lawsuits related to the da Vinci surgical system, which may have a material adverse effect on its financial condition[70] - In a patent infringement lawsuit, the damages awarded were reduced from $10 million to nominal damages of$ 1, with ongoing appeals expected to influence the final outcome[71] - The court has set a trial date for the antitrust claims against the company to commence on January 6, 2025[74] - The company is currently unable to estimate any potential losses arising from ongoing litigation matters[74] - The court ruled that the da Vinci robot and EndoWrist instruments occupy separate product markets for antitrust purposes[74] - The company has consolidated class action complaints related to antitrust allegations into a single case, which is ongoing[74] Product and Market Performance - The installed base of da Vinci surgical systems increased by 15% to approximately 9,539 systems as of September 30, 2024, up from 8,285 systems a year earlier[150] - Approximately 670,000 da Vinci procedures were performed in Q3 2024, marking an 18% increase from 567,000 in Q3 2023[150] - Instruments and accessories revenue rose by 18% to $1.26 billion in Q3 2024, compared to$ 1.07 billion in Q3 2023[150] - The company placed 379 da Vinci surgical systems in Q3 2024, up from 312 systems in Q3 2023[145] - The da Vinci surgical systems are designed to improve patient outcomes and lower the total cost to treat per patient episode compared to existing treatment alternatives[107] - The company plans to seek additional FDA clearances for the da Vinci SP surgical system and expand its regulatory approvals in international markets over time[109] Shareholder Activities - The company repurchased 1.5 million shares at an average price of $238.1 per share, totaling$ 350.0 million in share repurchases[85] - As of September 30, 2024, the remaining amount authorized for share repurchases under the program was approximately $1.1 billion[82] - The company has reserved approximately 20.6 million shares for future issuance under its stock plans, with a maximum of 8.9 million shares available as restricted stock units (RSUs)[90] - The unvested balance of RSUs as of September 30, 2024, was 5.3 million shares, with a weighted-average grant-date fair value of$ 311.73[92] - The company’s stock repurchase program has been authorized for a total of $10.0 billion since its inception, with the latest increase in July 2022 to$ 3.5 billion[82] Economic and Market Conditions - Future results may be adversely affected by macroeconomic factors, including inflationary pressures and elevated interest rates, which could impact hospital operations and patient care[23] - Hospitals are facing significant financial pressure due to elevated operating costs from supply chain constraints and inflation, which may negatively impact the number of da Vinci procedures performed[112] - Supply chain constraints have improved to pre-COVID-19 levels, although some residual stresses remain, particularly for engineered raw materials[23] - The company is actively engaged in mitigating supply chain risks and disruptions to ensure operational continuity[23]